Rev. Jackson, State of Michigan Announce “Save the Dream”
- 17.10.2007
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The Reverend Jesse Jackson, along with the Michigan State Housing Development Authority (MSHDA) - and other local agencies - to kick off Michigan’s “Save the Dream” consumer education and foreclosure assistance program. The program, a state-funded initiative is intended to help homeowners squeezed by adjustable rate mortgages and high-rate subprime mortgages deal with (and hopefully avoid) foreclosure.
According to the release, Michigan ranks 4th in the nation in foreclosures; with a rate more than double that of the rest of the nation. The kick off will include a tour by Rev. Jackson, meeting and speaking with local residents of Lansing, Detroit, Flint, Saginaw and Pontiac - all foreclosure-devestated areas - to announce the two foreclosure assistance programs introduced by the MSHDA.
ARM Assist Refinance, which helps residents who are in an adjustable rate mortgage obtain a fixed rate loan; and Rescue Refinance Program, which assists residents who are delinquent and have no mitigating options. Both programs have been endorsed by Gov. Granholm, who has urged the Legislature to introduce and pass enabling legislation.
“Healthy communities begin with healthy households, and based on Michigan’s foreclosure rate far too many residents are losing their homes,” said MSHDA Executive Director Michael R. DeVos. “Our goal is to provide assistance for those facing foreclosure; prevent others from facing foreclosure; and to protect Michigan residents from predatory lenders.”
According to Jackson:
“There is a national crisis as it relates to the number of foreclosures cross this country and Michigan is at the forefront largely due to lenders who take advantage of those who are already struggling,” said Rev. Jackson. “We want to put the power back into the hands of the every day citizen who is simply trying to hold on to his or her part of the American Dream.”
In addition to the foreclosure assistance programs mentioned above the Save the Dream campaign will also promote homeowner education including:
— Guidance on what to do when faced with foreclosure
– Highly trained counselors that will work with individuals on budgeting, credit repair, and foreclosure prevention
– Educate residents about MSHDA refinance assistance programs
– A toll-free phone number for residents to call when in need of assistance
As far as I’m concerned consumer education is a good thing. A bail-out is not. It will be interesting to see if these programs turn in to state aid for homeowners impacted by the foreclosure “epidemic” (as the release calls it). The one major problem I have with this besides the blatant lack of acknowledgment of any homeowner responsibility is some of the misinformation in the actual release itself; such as this paragraph:
Predatory or subprime lending is the practice of nonconventional lenders using unscrupulous means to attach high-interest loans to those who can least afford to pay them. Once locked into the excessive interest rates, the new homeowner soon falls short of the monthly payment, sending their home into foreclosure.
It shows a lack of understanding about the industry and financing options available to borrowers. Not all subprime loans were high interest rate. I personally saw our company write many subprime loans and you know what they were? 5.5% 30-year fixed loans. All given to subprime borrowers. Those are smoking rates on very solid financing vehicles, even for prime borrowers, and with 30-year fixed terms; there is nothing predatory about that loan, even though it is a subprime.
Go ahead, promote consumer education and awareness - but at least get the subject material straight yourself. What do you think?
